I couldn’t have asked for a better start to this week. I finished today for +3 pips off one sell trade which lasted 36 seconds and the whole trading session lasted 6 minutes.
I haven’t explained what the white and yellow lines in my graphics mean before, so let me attempt to do so now. As you can see in my snap shot today, the white datum lines show my starting point today, this is when I sat down to watch after my setup of the charts. The yellow datum lines within the Cable chart are approximately 30 pips either side of my white datum line which I aim to match against the top and bottom of wicks off prior Cable 1 hour candles in the same day. This helps me gauge the range of the currency’s movement, without having to watch the actual price every second. This also provides an indication of points when the currency might break through a previous high or low. I never used consistently use these datum lines before, but have been for several weeks now and it certainly helps.
Now that I have explained what my datum lines are, just look at how great today was. You can see the price of the Cable when I sat down and that there was a 20 pip (there abouts) red candle on the Cable already. Before entering by sell trade today, the currencies seemed to be correlated, but were not moving in one direction with any kind of momentum in order for me to enter a sell or buy trade. But then, out of the blue, the Swissy began to push up with momentum, the Euro began to push down with some momentum, but the Cable, at this point, wasn’t doing much. Then the Cable decided to jump down around 4 pips from 1.5617 to 1.5613 to catch up with the movement of the other currencies. Then, the Cable gradually reversed again, back up to 1.5617, along with some respective correlated gains and losses by the Euro and Swissy. If I remember correctly, this happened in both directions a couple of times, when after a couple of minutes, the Swissy decided to push up further, the Euro push down further, to the point that there was no wick at the bottom of the Euro – and I was lucky enough at this point, to enter a sell trade on the Cable at 1.5614, before the Cable had started its corresponding correlated movement. The Cable held at 1.5614 for a few seconds, then cleared the spread and held for a few seconds, went positive by +1 pip but quickly went back down to break even and hold for a few seconds, it then moved up by +2 pips, which is when I exited the trade. But by the time the system took a split second to close the trade, it had moved to +3 pips.
I hope I’m not jumping ahead of myself as it is still early days, but something is different compared to the last few weeks. I feel a lot more relaxed. I think I have finally got it clear in my head that when a trade looks good in terms of criteria and I decide to jump in, I just have to be ready to GOWID, not just when such a trade has gone positive, but even if it stalls right at the beginning even before clearing a spread. This way, I am limiting myself to small negatives as opposed to the negatives that you have seen me do in the past. But the equally important aspect of this type of trading is that I have to wait for good criteria before actually entering a trade, this is key to avoiding lots of small negatives resulting from me exercising GOWID well, but not getting the entry points right.
As I said in one of my posts last week, I think I am getting there – slowly but steadily – but one thing is for sure, I feed great today!
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